Eleventh-Hour Skeptics Target Sinking Clovis Oncology, Inc. (CLVS)

Piper Jaffray downgraded Clovis Oncology Inc (NASDAQ:CLVS), sending the shares sliding in intraday action

by Karee Venema

Published on May 15, 2015 at 12:00 PM
Updated on Jun 24, 2020 at 10:16 AM

Clovis Oncology Inc (NASDAQ:CLVS) has taken a turn for the worse today -- off 6.4% at $93.99 -- after Piper Jaffray downgraded the stock to "neutral" from "overweight," explaining a "point of maximal optimism may have been reached for the [company's] clinical data." Put players have been quick to respond to the sell-off, with the contracts changing hands at seven times the average intraday pace.

Receiving notable attention is the stock's May 90 put, which is being bought to open for a volume-weighted average price (VWAP) of $0.35. Based on this average entry price, breakeven for the put buyers at tonight's close -- when front-month options expire -- is $89.65 (strike less VWAP). Earlier, CLVS hit an intraday low of $91.18.

Today's accelerated put volume is nothing new for CLVS. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.55 ranks higher than 77% of all similar readings taken in the past year.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.93, which arrives in the 72nd percentile of its annual range. In other words, short-term speculators are more put-heavy than usual toward CLVS.

Heading into today's session, Clovis Oncology Inc (NASDAQ:CLVS) was boasting a 79.3% year-to-date lead. Part of this impressive price action was as a result of a regulatory boost in mid-April, as well as yesterday's 16.7% pop -- which came after the company said it will present data at the 2015 American Society of Clinical Oncology (ASCO) Annual Meeting later this month.

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